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19 Cards in this Set

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What are the two views in what a shareholder must show in demanding corporate information?

1. commonlaw
2. Statutory

What must a plaintiff show to get records pursuant to the commonlaw method?

1. Proper purpose- that it is related to plaintiffs interest as a shareholder.
2. For each item wanted, the S/H must show that the item is essential to the proper purpose.
3.There needs to exist a credible basis to find probable corporate wrongdoing satisfied through documents, logic, testimony or otherwise.

In regards to the commonlaw and plaintiffs demand for information, will a mere curiosity on behalf of the S/H or a desire for a fishing expedition suffice to satisify a credible basis for the records?

no

What is the Statutory method regarding S/H demand?

1. Usually has a duration or amount of ownership provisions.
2. Plaintiff still has the burden for all other records except stockholder lists.
3. By statute, it is now a burden of the corporation to prove that the demand for a stockholder list is for an improper purpose.
Note: the court can impose conditions on release of documents.

What is a cede list?

Cede & Co is one of the largest of the four regional depositories. A cede list is a list of owners of stock behind the depositories (usually brokerage firms). The cede list just lists the brokerage companies.

What is a NOBO list?

Non-objecting beneficial owners has the names of the acutal people that vote (the real owners.). It's the actual list of the shareholders who say "you can tell the people who i am"

What is a proxy?

written authorization given by a shareholder to someone else to represent him and vote his shares at a shareholders meeting.

What is a proxy solicitation?

The process by which shareholders are asked to give their proxies

What is a proxy statement?

A written statement sent to shareholders as a means of proxy solicitation.

How do we know if a company is subject to sec law?

They are only those corporations that are registered under SEC Section 12 which have:
1. There is a connection with interstate commerce.
2. 500 shareholders or more, and more than $10 million in assetw or
3. Registered on a national stock exchange.

What is the process to begin an analysis for security fraud?

look at all in the following order:
1. 10b5
2. 16b
3. c/l

For a security fraud case, what is a proper defendant?

A proper defendant is an insider, someone who has access to confidential corporate information because of position, or relationship to the corporation.

what is the test for a proper plaintiff in a securities fraud case?

Normally a purchaser or seller.

Pursuant to the security fraud and the commonlaw, is there liability regarding exchanges of stock?